April 19, 2024

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[THE INVESTOR] JB Financial Group has joined the growing list of companies replacing their auditing firms, according to industry sources on March 26.

Kwangju Bank and Jeonbuk Bank, key units under JB Financial Group, have all switched to EY Han Young from Deloitte Anjin, an accounting firm that was previously under fire for turning a blind eye to window-dressing the financial records of Daewoo Shipping & Marine Engineering.

Deloitte Anjin is one of Korea’s top three accounting firms. In March 2017, it was issued a fine worth 600 billion won (US$558.90 million) and a one-year business suspension by Korea’s Securities and Futures Commission for failing to report the accounting irregularities that occurred between 2013 and 2014 at DSME. 

Since the suspension ended as of end-2017, JB could have chosen to continue using Deloitte’s services. The company, however, decided against it based on the belief that Deloitte’s trust has been seriously compromised due to its involvement in DSME.

In 2016, the Korean Board of Audit and Inspection found 1.5 trillion won of accounting fraud in DSME’s books. In March 2017, the shipbuilder was given a 2.9 trillion won government loan to avoid bankruptcy.

By Lee Ji-yoon (jylee@heraldcorp.com)